Comparing a 6.66% 30-year fixed quote on a $220,000 New York purchase

A

AdaBrooks

Mortgage adviser
Established
I’m comparing mortgage quotes for a property purchase around $220,000 in New York. One lender has offered 6.66% fixed for 30 years. The advertised rate was lower, but the arrangement fee and my loan-to-value tier changed the actual offer.

Should I compare APR, interest over the period I realistically expect to keep the loan, or total cash cost including fees? The quote with the painful fee also has much better overpayment terms. I’m checking early-repayment conditions and portability too, rather than assuming I will refinance.
 
I’d calculate total cost over your likely ownership or refinance period: upfront lender fees, monthly payments and the remaining balance at the end of that period. APR is useful for an initial comparison, but it may not match your real timeline.

Also compare the cash needed at closing. A theoretically cheaper loan can still be the wrong choice if its fee leaves you without a comfortable reserve.
 
How large is the loan after the down payment, and how long do you expect to keep this property? Those two facts could decide whether the fee ever pays for itself. I’d ask each lender for the same loan amount and lock period so the quotes are genuinely comparable. Confirm whether the quoted rate requires paying points or meeting any other condition.
 
I wouldn’t give much value to overpayment flexibility unless you have a realistic plan and available cash to use it. Paying a large fee now for an option you may never exercise can be expensive. Monthly affordability matters more: test whether the 6.66% payment still leaves room for maintenance, insurance, taxes and an emergency fund.
 
There’s another caveat: don’t let an assumed future refinance make today’s quote look affordable. Rates may not move in your favor, and refinancing itself can involve costs. With a genuine 30-year fixed loan, rate-reset risk should not apply, but verify that the paperwork actually fixes the rate for the full term rather than using similar-sounding language.
 
On portability, I’d ask the lender to explain exactly what they mean. Can the existing loan really move to another property, or would a move require a fresh application and approval? The practical restrictions matter more than the label.

For the fee comparison, find the month when the lower payment has recovered the extra upfront cost. If you may sell or refinance before then, the lower-fee quote could be better.
 
Put the offers into a simple table with rate, APR, lender fees, cash due at closing, monthly principal-and-interest payment, prepayment terms and balance after your chosen comparison period. Then run at least two timelines rather than guessing one exact future: keeping the loan for several years and keeping it much longer. That should make the trade-off between the painful fee and better terms visible.
 
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